Worldwide Mobile Phone Market Grew Nearly 20% in the First Quarter;
Smartphones and Vendors Outside the Top 5 Keys to Growth, According to
IDC

April 28, 2011 11:04 PM Eastern Daylight Time

FRAMINGHAM, Mass.--(BUSINESS WIRE)--The worldwide mobile phone market grew 19.8% year over year in the first
quarter of 2011 (1Q11) fueled by high smartphone growth, especially in
emerging markets, and gains made by market challengers. According to the
International Data Corporation (IDC)
Worldwide
Mobile Phone Tracker, vendors shipped 371.8 million units in 1Q11
compared to 310.5 million units in the first quarter of 2010.

Smartphone growth worldwide, particularly in Asia/Pacific (excluding
Japan), Middle East and Africa (MEA), and Latin America, helped lift the
overall market to a new first-quarter high. Increasingly, mobile phone
makers and carriers are making smartphones affordable to a wider variety
of people, which has helped drive the market to new heights.
Smartphone-specific vendors, such as HTC, continue to grow sales at a
steady clip as a result of this trend.

"Several notable vendors, including feature phone makers, outpaced the
overall market, which contributed to share losses of some top
suppliers," said Kevin
Restivo, senior research analyst with IDC's Worldwide Mobile Phone
Tracker. "The growth of companies outside the top 5 vendors – vendors in
the 'Others' category, such as Micromax, TCL-Alcatel, Huawei, and
Research In Motion – shows that the overall market is still very much
ripe for share gains."

"At the same time, feature phones have represented the majority of
mobile phone shipments, but still are under tremendous pressure from
smartphones," adds Ramon
Llamas, senior research analyst with IDC's Mobile Phone Technology
and Trends team. "Even popular quick-messaging devices (phones with a
QWERTY keyboard), once a bright spot within the feature phone market,
appear to be losing steam as smartphones gain popularity. Still, IDC
does not expect feature phones to disappear quickly as there is still
strong demand across the globe."

Market Outlook

Nonetheless, IDC expects almost all of the worldwide mobile phone
market's growth to be driven by smartphones throughout the forecast,
which goes to 2015. "Increasingly smartphones will drive market growth.
This means feature phone makers will either need to become smartphone
dependent or consolidate that part of the market," noted Restivo.

Regional Analysis

The Asia/Pacific market grew thanks in part to strong mobile
phone shipments to Greater China despite the seasonally slow quarter.
Smartphone shipment growth was exceptional despite some key product
launch delays. In Japan, the market underperformed IDC's
forecast due to the impact of the earthquake and tsunami. Japan's
largest mobile operators ordered fewer phones than expected in March.

In Western Europe, Android-based phones and iPhones helped grow
the market in the seasonally slow quarter. New devices from HTC,
Samsung, and Sony Ericsson sold well in most countries in the high-end
tiers. Alcatel, Huawei, and ZTE Android devices helped drive mid-tier
segment sales volume. Meanwhile, feature phone shipments receded as
more smartphones hit the market. The CEMA markets performed
well on a year-over-year basis despite civil unrest in some Gulf
countries, such as Egypt, where sales were negatively impacted by the
turbulence. Nokia and Research In Motion performed well in the regions
overall.

In the United States last quarter, Apple's iPhone and the
LTE-enabled HTC Thunderbolt were two smartphones introduced at Verizon
Wireless that helped keep the category front and center of the overall
mobile phone market. Feature phones, including once popular quick
messaging devices, continued to lose ground. Similarly, in Canada,
the market grew thanks to smartphones. BlackBerry, iPhone, and Android
devices were best sellers.

The Latin America market growth continued last quarter as the
gap between smartphones and feature phones narrowed. Smartphone
shipments were aided by carriers, who are moving customers to 3G
networks while vendors shipped more touchscreen and QWERTY models. New
Android and Windows Phone devices were launched too, which helped
drive smartphone growth. The average selling prices also declined in
the region, thanks to aggressive expansion by Chinese vendors.

Top Five Mobile Phone Vendors

Nokia laid out its transformation strategy during the quarter,
one that will embrace Windows Phone as its primary smartphone operating
system, introduce further enhancements to its mobile phones, and invest
in future disruptions to the mobile phone market. Until that strategy is
fully realized, the company will rely on its current platforms to
compete in the market. Its Symbian-powered smartphones continued to find
a warm reception, and the company introduced the E6 and X7, both running
on the new Symbian Anna software. In mobile phones, Nokia ramped up
shipments of its C3 and X201 from last year and announced a dual-SIM
phone with the C2. What remains to be seen is how quickly Nokia will
introduce new phones as competition intensifies.

Samsung having posted a record Q1 shipment volume, further closed
the gap against market leader Nokia and extended its lead ahead of third
place vendor LG Electronics. Although feature phones comprised the
majority of its shipments, smartphones represented a greater share from
a year ago, nearly a fifth of its total volumes. Samsung appears well
poised to reach its goal of 50 million smartphones shipped this year, as
new models, including the Galaxy S II, 4G smartphones, and more
mass-market smartphones are expected to reach the market later on.

LG unit shipments declined on a year-over-year basis for the
third straight quarter. The phone shipment drop off was most noticeable
in Europe and the CIS countries where shipments on a combined basis
declined. The company hopes to deliver a better second quarter
performance with the introduction of products such as the Revolution,
which will run on the LTE network of Verizon Wireless, and the Big. The
question for LG will be whether feature phone declines in emerging and
other markets can be offset by smartphone gains in future.

Apple maintained its number 4 spot on IDC's Top 5 list thanks to
a record quarter for unit shipments. The company posted the highest
growth rate of the worldwide leaders. Apple's results were buoyed by
strong sales on Verizon Wireless and additional carrier deals; the
company is now on 186 carriers operating in 90 countries. The iPhone
once again sold particularly well in developed economic regions of the
world, such as North America and Western Europe.

ZTE held on to the number 5 slot in the rankings thanks to strong
year-over-year growth in countries and regions where it does
particularly well, such as China and Latin America. ZTE primarily sells
low-cost feature phones but the company is making a concerted effort to
ship more smartphones, which are based on the Android operating system,
this year. The company has said it will try to create brand awareness
and sell more devices in developed markets, such as the U.S., this year.

IDC is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications,
and consumer technology markets. IDC helps IT professionals, business
executives, and the investment community to make fact-based decisions on
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provide global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries worldwide. For more than
47 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the
world's leading technology media, research, and events company. You can
learn more about IDC by visiting www.idc.com.

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